SHANGHAI, Oct 8 (SMM) – Three-month LME lead bottomed out during China’s National Day holiday. LME lead fell to $2,060/mt on September 30 and rebounded to $2,168/mt on October 1. Then the prices fluctuated between $2,130-2,170/mt during the holiday. LME lead closed at $2,136/mt yesterday, down $0.5 or 0.02%. The open interest stood at 109,000 lots.
Various economic risk events occurred frequently around the world during the holiday. China and US had a frank dialogue on economic and trade issues; the US debt ceiling is approaching; the Reserve Bank of New Zealand raised the interest rates for the first time in seven years; and the prices of the natural gas and crude oil soared amid the global energy shortage. The US stocks fell across the board
The production of primary lead, secondary lead, and lead-acid battery was affected to different degrees before the holiday due to the losses, power rationing, and environmental protection. The production cut were more serious on the supply side, so the social inventory of lead ingots declined before the holiday. SMM will continue to monitor the impact of the power rationing and environmental protection on the supply side. The deliverable primary lead brands will start maintenance in October, and the output may decline by 20,000 mt/month. The in-plant inventory changes of the primary lead during the holiday and the delivery expectations after the holiday are worth attention. Except for the plants under the maintenance, most primary lead smelters maintained normal production during the holiday, while most downstream companies took the holiday for 2-3 days.
SMM expects the lead prices to fluctuate lower in the short term after the holiday. SMM will pay key attention to the lead ingot inventories as well as the guidance on the lead prices from the profits and losses of the secondary lead.